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CEI Responds to FCC Move to Deregulate Broadband

Friday, April 21, 2017 7:57
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Reversing initiatives it pursued during the Obama administration, the Federal Communications Commission has accelerated its push to deregulate, by voting to ease limits on broadcast TV ownership and prices that large telecom companies can charge businesses and governments for bulk broadband services. The new FCC chairman, Ajit Pai says the move isn’t ideological or a push to deregulate with haste, but rather an attempt to promote more competition.

Wayne Crews of the Competitive Enterprise Institute, praising the move, had this to say:

Lots of changes may be underway at the FCC, but the bottom line is government should exercise less control over private media organizations and mergers.

Media ownership rules harm consumers and speech. It will take vast resources to build both the broadband networks of tomorrow and to create the increasingly narrow-casted, interactive content that consumers are demanding. Mergers and cross-ownership freedom, perhaps on a vastly unprecedented scale unthinkable today, will likely be part of the market processes necessary to take communications services to new heights.

We ought not petition the FCC to tighten its regulatory grip, but rather phase out that agency’s involvement in price, entry and ownership regulation in frontier technologies altogether. FCC’s commissioners should be, and now are, leading that charge in today’s cornucopia-like communications environment. Intervention—whether blockages or conditions imposed on deals—means we’re being treated to more turf preservation rather than the needed shifting toward the marketplace’s own aggressive discipline of communications. Antitrust distracts us, postponing the day we address government’s own policies that artificially restrict bandwidth and spectrum.

Competition, properly understood, has little to do with the number of competitors and industry concentration ratios that bewitch government commissions. It is properly understood as an extension of the same “voluntarism” that characterizes a free society that enshrines property and the right of contract, from social to commercial settings.

Markets are the sum of competition and voluntary and tacit agreements between firms; Suppliers, business customers, and consumers have ample incentive to monitor and discipline abusive practices without antitrust, which itself is regarded as immune from the need for discipline. Yet unlike voluntarism, antitrust entails confiscation, restraint, and forced aid of competitors.

Antitrust activism will hobble tomorrow’s technology and communications sectors, painting a bulls-eye on the back of competitors that rise above the fray or engage in large-scale transactions. Too often, antitrust often doesn’t create or assure competitive outcomes; it prevents them. That makes it an anti-competitive special-interest luxury we cannot—and never could—afford. The rise of global competitors makes reform more urgent.

Friday, April 21, 2017
Referenced experts: 
Clyde Wayne Crews
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